Philanthropy Outlook 2026 Webinar

How will current tax policies shape charitable giving?

On March 17, 2026, CCS hosted a one‑hour discussion of findings from Philanthropy Outlook 2026: Estimating Effects on Charitable Giving from the One Big Beautiful Bill, examining how policies in 2025 H.R. 1 may influence household and corporate giving and highlighting planning considerations when timing shifts such as bunching affect annual totals.

Why Tax Policy Context Matters

The conversation emphasized treating the report’s modeling as signals of potential change by donor segment, while remembering that overall totals also move with broader economic conditions. As Patrick Rooney noted, the estimates isolate “pure policy effects,” not a one‑year forecast. Leaders were encouraged to plan across multi‑year horizons when timing strategies like bunching create year‑to‑year variability in results; Greg Hagin put it succinctly: “There could be an unevenness within a year, but arguably more predictability over multi years.”

Participation and the Donor Base

Discussion of a universal charitable deduction focused on the potential to broaden participation after years of decline in the share of households that give. Patrick Rooney explained the participation impact as “six to 8.7 million new donors” phasing in over time as households adjust. Kat Rosqueta underscored why this matters for the sector: increasing participation is “encouraging” for a healthy and vibrant democratic society.

Timing and Planning Across Multiple Years

Speakers underscored that bunching and other timing choices can lead to uneven annual totals but support more predictable planning over multi‑year periods. Greg Hagin: “There could be an unevenness within a year, but arguably more predictability over multi years.” Organizations were encouraged to align goal‑setting and board reporting to a multi‑year view when gift timing shifts across tax years.

Interpreting the Top‑Bracket Deduction Cap

For donors in the top marginal tax bracket, capping the value of itemized deductions at 35 percent effectively raises the after‑tax cost at the margin. Patrick Rooney translated the change simply: “Going from 37 to 35 basically is like a 5.7% price increase.” The discussion also noted that some donors will continue giving based on pledges, habit, or values.

Corporate Giving and Timing Choices

With a 1 percent floor for deductibility, some companies may bunch contributions to exceed the threshold in particular years. Patrick Rooney pointed to the concentration dynamic in corporate giving and anticipated timing adjustments, while Kat Rosqueta noted that motivations beyond tax—such as reputation and employee engagement—also shape decisions.

Keep Mission Front and Center

Speakers encouraged nonprofit leaders to pair any policy explanations with a clear impact story when communicating with donors and boards. Kat Rosqueta: “Make sure there’s as strong an understanding of the impact story as there is of the tax benefit.” The group also acknowledged practical tools some funders use to help organizations manage revenue variability when timing shifts occur.

HOSTED BY:

Greg Hagin
Managing Partner, CCS Fundraising
Greg brings more than two decades of experience advising mission‑driven organizations around the world. As Managing Partner at CCS Fundraising, he has guided major institutions through transformational campaigns, strategic growth, and complex organizational change. His collaborative leadership and deep understanding of philanthropic behavior make him an ideal moderator for today’s conversation.

Katherina “Kat” M. Rosqueta
Founding Executive Director, Center for High Impact Philanthropy
Katherina M. Rosqueta is a member of the CCS Board of Directors and a nationally recognized leader in high-impact philanthropy. As the Founding Executive Director of the Center for High Impact Philanthropy at the University of Pennsylvania, she has spent her career helping donors, funders, and social sector leaders use evidence and insight to strengthen their impact.

Patrick M. Rooney
Executive Associate Dean Emeritus, Indiana University Lilly Family School of Philanthropy
Patrick is a pioneering scholar, researcher, and nationally recognized expert in the impact of economics and tax policy on philanthropy. He founded the Indiana University Lilly Family School of Philanthropy’s research unit, building one of the nation’s premier philanthropy research organizations. His numerous leadership roles include helping found the school and serving on many nonprofit boards and national advisory committees.

Frequently Asked Questions

Tax Policy Changes and Timing

When do these tax changes take effect?

Most provisions apply to gifts made beginning in 2026 and affect Tax Year 2026 filings and beyond. Organizations should align planning cycles, campaign strategies, and donor communications accordingly.

Are the projections adjusted for inflation?

All dollar amounts are presented in 2025 dollars to ensure consistency and comparability across projections.

Universal Charitable Deduction (Non-Itemizers)

How is the new universal charitable deduction communicated to the public?

All dollar amounts are presented in 2025 dollars to ensure consistency and comparability across projections.

Do non-itemizers need to substantiate their charitable contributions?

Donors must retain documentation to support their claims. Consistent acknowledgment and receipting practices remain essential.

How does the non-itemized deduction encourage giving?

The deduction reduces the effective cost of giving. Its impact depends on donor awareness and confidence in applying the benefit. Without clear communication, the incentive is unlikely to drive meaningful behavior change. Donors must retain documentation to support their claims. Consistent acknowledgment and receipting practices remain essential.

Enhanced Deduction for Donors 65 and Older

How does the non-itemized deduction encourage giving?

Itemized Giving and the 0.5% AGI Floor

What is the 0.5% AGI floor?

Donors may deduct only the portion of charitable contributions that exceed 0.5% of Adjusted Gross Income over the tax year. This introduces a threshold that changes how deductions are realized.

Is the threshold applied per gift or in total?

The threshold applies to total annual giving.

Did a deduction floor exist previously?

All eligible contributions were previously deductible without a minimum threshold.

Will this encourage donors to give more?

The policy structure limits broad impact. Only contributions above the threshold are deductible. This reduces the incentive to increase giving solely to reach the threshold.

Which donors are most affected?

Higher-income households are most affected. These donors demonstrate consistent responsiveness to tax policy changes, influencing both timing and structure of major gifts.

Could the threshold increase over time?

The introduction of a floor creates a precedent for future adjustments. Similar provisions in the tax code have expanded over time.

Impact on Overall Giving

Do these policies increase or decrease giving?

Modeled estimates indicate a modest net decline in overall giving. The combined central estimate suggests an approximate $5.69 billion (about $18 per person in the US) (about $18 per person in the US) annual reduction. Actual outcomes vary based on economic conditions and donor behavior.

Do these policies increase or decrease giving?

Are certain sectors more affected?

Organizations that rely on high-income individuals or corporate giving face greater pressure. Organizations supported by broad-based giving are more insulated.

How is international philanthropy affected?

The impact applies to U.S. tax-deductible giving. Donations from non-U.S. donors are not directly affected.

High-Income Donors and Giving Patterns

What share of giving comes from high-income households?

Households earning more than $500,000 account for approximately 23% of total giving. Households earning more than $1 million account for approximately 19%. Their influence is greater within itemized giving.

How do high-income donors respond to tax changes?

High-income donors respond strongly to tax policy changes. These changes influence giving amount, timing, and vehicle selection. Proactive engagement remains essential.

Corporate Giving and the 1% Floor

What is the 1% corporate giving floor?

Corporations may deduct only the portion of contributions that exceed 1% of profits. This introduces a constraint that affects giving strategies.

How concentrated is corporate giving?

Corporate giving is highly concentrated. A relatively small number of companies account for the majority of total giving. Many corporations give below the 1% threshold and may lose deductibility.

Does this affect corporate foundations?

The policy applies to contributions made to corporate foundations. It does not affect grantmaking by those foundations.

Will alternative giving vehicles increase?

Increased use of donor-advised funds and corporate foundations is likely. These vehicles provide flexibility in structuring contributions.

Does this affect matching gifts or sponsorships?

Matching gifts are affected because they are treated as corporate charitable contributions. Sponsorships may fall outside this framework depending on classification.

Donor Strategies and Giving Behavior

What is bunching?

Bunching consolidates multiple years of giving into a single tax year to exceed deduction thresholds and improve tax efficiency.

How does bunching affect organizations?

Bunching introduces variability in annual giving patterns, particularly among major donors. This requires careful interpretation of year-over-year performance.

Can gifts be structured across multiple years?

Gifts may be structured across multiple years depending on the giving vehicle and organizational policies.

How are DAFs affected?

The non-itemizer deduction does not apply to contributions made to donor-advised funds. DAFs remain attractive to itemizing donors seeking flexibility in timing and distribution.

Additional Policy Clarifications & Emerging Considerations

Is the 0.5% threshold based on AGI?

The threshold is based on Adjusted Gross Income.

Are deduction rates changing for high-income donors?

Deduction rates are modestly reduced at the highest income levels, lowering the overall tax benefit of giving.

Do policies offset one another?

Some provisions introduce incentives while others impose constraints. The combined effect results in a modest net reduction in overall giving.

Are behavioral factors included in projections?

Behavioral responses are incorporated through measures such as tax price elasticity. These measures reflect how giving has historically responded to tax changes.

Are broader cultural shifts affecting philanthropy?

Evolving attitudes among ultra-high-net-worth donors may influence long-term giving patterns and expectations.